Follow the Debate - Yuan Revaluation and Internationalisation News Archive July 2010
Follow the Debate
Yuan Revaluation & Internationalisation
You can scan the Articles over time and see it evolve and change
Graeme has been using ChinesePod since 2007
"I highly recommend ChinesePod, I haven't found any Online teaching programmes that come close."
The Wall Street Journal 31/7/2010
Caixin Online 31/7/2010
Nimble Exporters Add Weight to Forex Reform
Therefore, the effect of yuan appreciation on trade would be quite limited.
China Daily 31/7/2010
China to punish illegal forex activities
BEIJING - China's foreign exchange regulator said Thursday that it will increase punishments for illegal foreign exchange activities.
The move aims to help curb the hot money inflows and promote sound development of the foreign exchange management, the State Administration of Foreign Exchange (SAFE), the regulator, said in a statement.
The Wall Street Journal 29/7/2010
Kaixin – IMF (International Monetary Fund) is a misnomer. It should be the USMF (United States Monetary Fund). After all it has always served US economic and geo-political interests. It is doing so once more.
China Daily 29/7/2010
The Wall Street Journal China RealTime Report 28/7/2010
China's Currency Glasnost Has Its Limits
All of a sudden, China's central bank can't stop talking about the country's currency regime.
Three public statements by People's Bank of China Vice Governor Hu Xiaolian in the space of a fortnight have set out the central bank's thinking on the yuan. Her arguments, that China should move toward a more flexible currency regime, are remarkable only in that they have been made so publicly by a senior Chinese central bank ...
China Daily 28/7/2010
China Daily
The silver lining of wage increase
Stephen S Roach
The author is non-executive chairman of Morgan Stanley Asia and a member of the faculty of Yale University. He has the book, The Next Asia, to his credit.
Finally, it is important to note that increasing worker compensation is a key ingredient of China's pro-consumption growth strategy. A serious shortfall in the growth of consumer purchasing power remains a critical problem for an unbalanced Chinese economy. Personal income currently amounts to just 40 percent of Chinese GDP - decidedly sub-par by international standards and down over 10 percentage points from the 51 percent reading in 2000. That needs to change if China is ever going to come to grips with its rebalancing imperatives.
Yet that could well be the real silver lining to this story. To the extent that compensation increases now outstrip the growth in GDP, the labor income share will begin to rise. That sets the stage for increases in household purchasing power, which are critical for pushing China's consumption share of its GDP up from the rock-bottom 36 percent reading in 2009.
Rather than bemoaning the end of low Chinese labor costs, the global debate should focus more on the constructive implications of this important development for the long-awaited pro-consumption rebalancing of the Chinese economy.
Kaixin:
From China Daily 19th March 2010
Morgan Stanley: Yuan not to blame for US woes
‘BEIJING - Morgan Stanley Asia chairman Stephen Roach said Friday it was ironic for the US to blame China's currency for high unemployment rate and trade deficit, and trade sanctions on China would have a disastrous outcome for the United States.’
Nobel economist: Yuan is not the crux
‘The US trade deficit with China results from a myriad of factors, and pressuring China to revalue its currency won't solve the issue, a leading US economist said today.
Joseph E. Stiglitz, Columbia University professor and Nobel laureate, said there are many other ways for the US to address its trade imbalance with China, one of which is loosening restrictions on hi-tech exports to China.
He pointed out that although it is necessary for China to improve the exchange rate of the yuan, easing foreign investment and adjusting fiscal policy are equally important.
He was speaking at the annual China Development Forum in Beijing, which was founded in 2000 by the Development Research Center of China's State Council, the Cabinet.’
Interestingly, a report on CCTV-9 last night covered the Congressional Hearing on this issue. ‘Harvard professor warns of currency war.'
Also, a video report from CCTV covering the issue, which including graphs of the yuan’s value v $US, ‘It's unreasonable to ascribe China's trade surpluses to the yuan's exchange rate.'
The last word for the moment is from Timothy Geithner, ‘US cannot force China to change exchange rate’
One of the things Kaixin has noticed is that China is forming bi-lateral relations all over the world. It is actively diversifying, and reducing its reliance on America. Also, I would opine, it is setting the stage for using the Yuan as a trade currency, bypassing the $US. When the yuan is strong enough, it will be allowed to float. The Chinese are not stupid and will not send out a weak and vulnerable panda bear to compete with the large and ferocious American eagle. Unless, of course, other factors, such as inflation, intervene. Though, I suspect, it will be a floating Yuan with Chinese Characteristics.
Kaixin - We have had quite a bit to say on this issue over time, from March 2010:
You may diss-agree with Stephen Roach, but you can’t dismiss him. He is an acknowledged economic expert on Asia in general and China in particular. He also has no axe to grind being Asia Chairman of a major American Bank; except possibly not wanting to see America shoot itself in the foot.
‘US politicians did not want to accept their responsibilities for the unemployment rate, which was close to 10 percent, so they preferred to blame someone else, he said.’
I have been saying this for some time. The politicians in the ‘west’, America in particular, were happy to benefit from trading with China through the 1990’s. They preened themselves and told their constituents how brilliant they were at engineering such prosperity with low inflation.
What utter bullshit, as the Global Financial Crisis demonstrated.
It was all based on importing low cost widgets from China and that gigantic ponzi scheme from Wall Street that turned American houses into tulips.
The pollies can’t now go to said constituents and fess up. Wall Street is keeping its head down and trying to figure out another ponzi scheme. Indeed, that is the only thing that is certain to happen. Wall Street will figure out another ponzi scheme and the great unwashed will fall for it ………. again.
It will be something to do with carbon trading I suspect.
Actually, I doubt that pollies understand what has happened. So, not being prone to looking in mirrors, they look elsewhere. Everyone in America knows the Chinese are getting uppity, so who better to blame. Pollies all need a simple message to recite.
“The yuan is undervalued and that is the cause of all your troubles,” is a simple message. One the American pollies have grasped as firmly as they grasp their collective …..
It also has a simple solution; one the pollies can be seen to be doing something about. So they jump up and down and make a big noise. Noise, is often mistaken for action by pollies.
If it is such a problem now, then it should have been seen way back when. Why didn't the pollies do something about it then? Easy, they were too busy preening themselves in unearned glory.
If Stephen Roach is right, then that whisp of gun smoke won’t be coming from the pollies guns, it will be coming from that small hole in their foot.
The Wall Street Journal 27/7/2010
IMF Sees Yuan as Undervalued
Despite China's decision to adopt a "flexible" exchange rate, the International Monetary Fund's long-delayed review of the Chinese economy found that the yuan is "substantially undervalued," according to IMF officials.
Kaixin – IMF (International Monetary Fund) is a misnomer. It should be the USMF (United States Monetary Fund). After all it has always served US economic and geo-political interests. It is doing so once more.
The Wall Street Journal 23/7/2010
Aisa Times Online - China's time to draw the line
By Antal E Fekete
Milton Friedman's theory of floating exchange rates, on which the international monetary system has been based since 1971, has given rise to a coercive regime in the sense that International Monetary Fund (IMF) statutes forbid member countries from stabilizing the value of their currencies. A country attempting to do that is branded "a currency manipulator" and is threatened with trade sanctions.
The prohibition is understandable. It is designed to protect the scheme whereby the US dollar balances of the surplus countries are stealthily embezzled.
Antal E Fekete has since 2001 been consulting professor at Sapientia University, Cluj-Napoca, Romania. In 1996, Professor Fekete won the first prize in the International Currency Essay contest sponsored by Bank Lips Ltd of Switzerland.
Kaixin - A Must Read
Asia Times Online 22/7/2010
Hong Kong goes on yuan spree
By Olivia Chung
Individuals and corporations in Hong Kong keen to hold Chinese yuan have been quick to take advantage of a revised agreement that increases access to the currency and which will strengthen the city's role as an intermediary between the rest of the world and the fast-growing mainland economy.
VIDEO - CCTV 9
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Video: YUAN RISE SLIGHTLY AGAINST US DOLLAR
2010-07-21 14:42:03
The Wall Street Journal 16/7/2010
Early View on China's Currency Overhaul: Little Change
A month after China announced it would ease its currency's de facto peg to the dollar, the yuan has gained just 0.7% against the dollar, and the stated policy shift has done little to defuse political anger at China in the U.S.
Kaixin - The US has its own agenda. China also has its own agenda, not to be shafted by the US, see:
Asia Times Online 9/7/2010
China's time to draw the line
By Antal E Fekete
Milton Friedman's theory of floating exchange rates, on which the international monetary system has been based since 1971, has given rise to a coercive regime in the sense that International Monetary Fund (IMF) statutes forbid member countries from stabilizing the value of their currencies. A country attempting to do that is branded "a currency manipulator" and is threatened with trade sanctions.
The prohibition is understandable. It is designed to protect the scheme whereby the US dollar balances of the surplus countries are stealthily embezzled.
Antal E Fekete has since 2001 been consulting professor at Sapientia University, Cluj-Napoca, Romania. In 1996, Professor Fekete won the first prize in the International Currency Essay contest sponsored by Bank Lips Ltd of Switzerland.
Kaixin - A Must Read
Global Times 16/7/2010
Rising yuan will leave Chinese markets sore but stable
Editor's Note:
The People's Bank of China (PBC) last month decided to proceed with reform of the yuan exchange rate regime. Since then the yuan has risen from 6.82 to 6.77 against the dollar. The pace of reform and appreciation is claimed to be gradual and controllable, but some still believe that there may be dramatic results. Global Times (GT) reporter Wang Di talked to Yu Yongding (Yu), former member of the Monetary Policy Committee of the PBC, on currency reform and the internationalization of the yuan.
Caixin Online 15/7/2010
BOC to Offer Yuan Cash Settlement for Taiwan Banks
China Daily 15/7/2010
Stable currency 'vital for exports'
Nation's traders hit by appreciation of yuan, lowering of tax rebates
BEIJING - A leading Chinese trade think-tank called on the government to ensure there are no major changes to currency and export-related policies, citing the "unhopeful" prospects for Chinese exports in the coming months despite the better-than-expected performance in June.
The Wall Street Journal 14/7/2010
China Daily 13/7/2010
Currency moves may imperil textile firms
BEIJING: Half of China's textile companies risk going to the wall if the yuan appreciates 5 percent against the US dollar, an industry lobby group warned.
China National Textile and Apparel Council Vice-President Gao Yong attributed this knife-edge existence to the industry's thin profit margins of around 3 to 5 percent.
The Wall Street Journal 12/7/2010
China's Trade-Surplus Growth Increases Pressure to Let Yuan Rise
BEIJING—China's trade surplus rebounded in June to its highest level in half a year, according to government economic data that could increase pressure on China to let the yuan strengthen more quickly.
The data, released at the weekend, paint a picture of cooling domestic growth but so-far resilient demand for Chinese goods from the global economy.
Asia Times Online 9/7/2010
China's time to draw the line
By Antal E Fekete
Milton Friedman's theory of floating exchange rates, on which the international monetary system has been based since 1971, has given rise to a coercive regime in the sense that International Monetary Fund (IMF) statutes forbid member countries from stabilizing the value of their currencies. A country attempting to do that is branded "a currency manipulator" and is threatened with trade sanctions.
The prohibition is understandable. It is designed to protect the scheme whereby the US dollar balances of the surplus countries are stealthily embezzled.
Antal E Fekete has since 2001 been consulting professor at Sapientia University, Cluj-Napoca, Romania. In 1996, Professor Fekete won the first prize in the International Currency Essay contest sponsored by Bank Lips Ltd of Switzerland.
Kaixin - A Must Read
The New York Times 9/7/2010
U.S. Says Renminbi Still Needs to Rise
The United States Treasury Department says China’s currency, the renminbi, “remains undervalued” and needs to rise more, but it stopped short of branding the country a currency manipulator.
The Wall Street Journal China RealTime Report 9/7/2010
Full Text of Treasury Report on China’s Economic Policies
The following is the section on China in the Semi-Annual Report on International Economic and Exchange Rate Policies, which the U.S. Treasury sent to Congress on Thursday.
China Daily 9/7/2010
China not currency manipulator: US Treasury
WASHINGTON -- The Obama administration announced that it has decided not to label China a currency manipulator in a semi-annual currency report released Thursday.
"Treasury has concluded that no major trading partner of the United States met the standards identified in Section 3004 of the Act," the Treasury Department said in its semi-annual report sent to Congress on international economic and exchange rate policies.
The Age 7/7/2010
Diplomacy dictates no label for China on currency
Caixin Online 7/7/2010
Revaluation Causes Concern Among Exporters
China Times 7/7/2010
First offshore RMB CD issued in HK
HONG KONG - CITIC Bank International (CBI), a Hong Kong-based subsidiary of China CITIC Bank, announced Tuesday the issuance of the inaugural offshore renminbi Certificate of Deposit (RMB CD), the first of its kind in Hong Kong.
The New York Times 6/7/2010
Baby Steps to Global Role for Renminbi
BEIJING — Each journey of a thousand miles begins with a single step. Yet for the trek to turn the renminbi into a global currency, China is only just lacing up its boots.
Kaixin - The last 30 years have demonstrated just how fast China can lace up its boots and take those steps, devouring a 1,000 miles in record time.
The Wall Street Journal 5/7/2010
The Wall Street Journal China RealTime Report 2/7/2010
Polishing the Yuan
China may be considering another step toward opening its capital markets to the outside world, a move that could help make the yuan an international currency.
China Themes
Yuan Revaluation & Internationalisation
Graeme has been using ChinesePod since 2007
"I highly recommend ChinesePod, I haven't found any Online teaching programmes that come close."
Set in Zanzibar in 1910, it is the story of two people from different worlds falling in love. Susan immerses herself in Zanzibar. Asim falls in love with this woman from the nation that killed his wife. Susan is a spy. Asim is the chief advisor to the Sultan of Zanzibar. Germany and France are holding secret negotiations to form a Pan European alliance, which would isolate Britain and destroy her power. Susan and Asim are caught up in all this and their love is finally dashed on the cold, hard reality of international high politics.
Available on Amazon's Kindle $4.99 - Over 400 Pages
Chapter One
Zanzibar
'A maharaja’s ruby cast on a Persian carpet by the blackest of hands'
Their souls danced, honouring his promise.
The ancient dhow stirred in the soft morning breeze. Like a sleepy lion, it began to move through the water, snuffling about the other boats on the harbour; some scurrying, some at anchor, some darting before a brief gust of wind. The lateen sails a bustling panorama of blood-red and sun-bleached white.
Aft, the woman's eyes searched the skyline, drinking in the architecture of Stone Town, the heart of Zanzibar; its jagged, cluttered silhouette so familiar, so much a part of her soul.
Abruptly, her eyes ceased their restless searching, jagged by an invisible hook, transfixed by the grand buildings on the northern shore, Beit-al-Ajaib, the House of Wonders, Palace to the great Sultan of Zanzibar. The distinctive architecture captured in the tropical light: coconut white outlined by contrasting shadow plays of pepper black.
A smile, ever so slight, started to play on the edge of her mouth then disappeared. A memory that should have been fond instantly turned to sharp unbearable pain. Her eyes hardened and moved on.
Without warning the captain threw the rudder over. Stumbling, the woman barked her shin on a wooden box, a rough-hewn coffin. She recoiled, knocking over an untidy stack of cane baskets. Imprisoned in the baskets, rusty cockerels, their scruffy heads straining through the latticework, snapped at her, cried out to her; their raucous din overwhelming her, drowning her.
Dimly, through the fog of noise, the strident swearing of the sailors in Kiswahili seeped into her conscious. Understanding, she smiled mirthlessly.
The coffin had been carelessly stowed, a chore, rather than a labour of respect or love.
London 1910
“Hello, who are you? I am Oliver, is Edward at home?”
The words were spoken by a tall, impeccably dressed young man as he rushed into Edward’s flat shaking off surplus water and calling for whisky while shoving his umbrella into a stand. It was a blustery, grey, bitterly cold February afternoon in the heart of London. He brushed a curl of soft auburn hair from his forehead and smiled charmingly.
Susan laughed, her hazel eyes dancing with the exhilaration of the new. “Yes, he is having a bath. I think he is trying to get warm. I’m Susan, Susan Carey, his sister.”
“Ahhh yes, from Australia. How do you do?” said Sir Oliver, smiling broadly and offering his hand. He noticed the laughter in her eyes, and the depth, particularly the depth, intensified by jade flecks that made them striking and alluring. “So, you have arrived, good trip I trust.”
“I am very well thank you, and yes, it was a good trip,” replied Susan.
He laughed and glanced at the sitting room, “whisky?”
“Oh, I’m sorry, please come in…….. that was silly of me, after all, it is your flat.”
Oliver smiled and gestured for Susan to lead the way. He followed her into the room, and after helping himself to a generous portion of whisky, walked over to the fire.
Shortly after, Edward, wrapped in a huge ruby-coloured dressing gown and wiping soap from his ear strode into the room. He was of similar age to Oliver, late twenties, well built, if slightly podgy, with dark auburn hair and a full moustache. Susan looked up and smiled to herself, she could see now where he had picked up some of his new mannerisms.
“Thought I could hear voices. I see you two have met, no need for introductions then.”
As he was speaking, Edward walked to the side table and grabbed a whisky decanter by the neck. He glanced at Oliver who nodded. A long finger snaked into one of the tumblers followed by the distinctive clink of crystal. He swept the decanter off the table and carried it to where Oliver was sitting. After pouring the whisky, he sank into a lounge chair and sipped from his glass, enjoying the warm glow as it spread through his body.
Suddenly he sat up exclaiming, “Sorry sis, would you like something to drink?”
“Kind of you to remember, but no thank you, and yes, Oliver has already inquired.”
Edward nodded and sank back into his lounge chair.
They chatted, tentatively at first, getting to know one another. Edward had not seen Susan for two years and was unsure how his sister would take his new relationship. Oliver was intrigued by Susan. An attractive, self-assured young lady of high intelligence with a degree was a rare find. And, as fate would have it, she was also a trained and experienced teacher. He suggested a picnic at Oxford, which was met with ready acquiescence. Arrangements were made for the following Sunday.
“I’ll see if the Rolls is available,” mused Oliver. “Must ring father, haven’t spoken to him in ages.”
Oliver, Sir Oliver Marchmaine, was an unaffected young man of intense intelligence who saw life as a great adventure to be lived to the full. He was also unyieldingly loyal to his country, England, which is why he had joined Military Intelligence on leaving Oxford.
It was 1910 and Europe was stirring. It was a time full of interest, intrigue and danger. The European chessboard was becoming increasingly complex, the moves more subtle. A time when an unexpected move or feint could have profound consequences.
Regaining her balance, the woman’s eyes were drawn, hesitantly at first, resisting back to Beit-al-Ajaib. She wondered if it was still the same. Still the same centre of power and intrigue that had been so much a part of her life all those years before; that had defined her life.
She remembered those first few moments, remembered standing in the foyer of the palace, .………… remembered the breathtakingly beautiful Persian tapestry ........
The sea breeze stirred her clothes. She smiled a little sadly, and in her mind the tapestry gently swayed. Two small apparitions ran giggling up the stairs: two small exquisitely rich burkas disappearing along the first floor landing. Childish squeals of mischief and joy left in the air.......
“Move to seaward, you accused of Allah! Move!”
Her thoughts were clawed back to the dhow, the captain crashing the tiller over to avoid another boat on the crowded harbour. The woman instinctively ducked her head to avoid the heavy boom as it swung over her, the rusty cockerels squawked their raucous indignation, their heads straining through the latticework, relentless.
The collision avoided, the dhow continued on its way. The cacophony dying down to the occasional command by the captain or the cry of a seagull.
The woman's thoughts returned to Beit-al-Ajaib
…………. laughing and giggling, girls of seven or eight. A door on the first floor slammed and all sounds of them disappeared. Silence. The woman smiled. She could see herself, a young woman, dressed plainly, unselfconsciously, her sexuality tantalisingly just out of reach, hidden beneath the thin veil of her clothing. She remembered standing alone in the foyer, looking around, perplexed. Asim came through a door to the left of the tapestry.
“Salaam.”
The woman started and looked around. Then, realising, was cold again. Alone again. Alone, rocking to and fro to the rythm of the sea. Alone, beside a rough-hewn coffin.
Now Available on Amazon's Kindle $4.99 - Over 400 Pages
Graeme has been using ChinesePod since 2007
"I highly recommend ChinesePod, I haven't found any Online teaching programmes that come close."
